Is Hydrogen Our Future?

Green hydrogen has emerged as a promising solution to accelerate the energy transition worldwide. The current energy crisis in Europe and the quest for diversification of supplies unleashed by the war in Ukraine will probably accelerate the development of a green hydrogen economy. 

On December 3, 2022, Dr. Nicola De Blasio, Senior Fellow with the Belfer Center’s Environment and Natural Resources Program (ENRP), chaired a panel discussion, “Is Hydrogen Our Future?,” at the Rome MED – Mediterranean Dialogue (Rome MED), an annual high-level conference on Mediterranean geopolitics organized by the Italian Ministry of Foreign Affairs and International Cooperation and the Italian Institute for International Political Studies (ISPI). The panel discussion was part of ENRP’s Future of Hydrogen project’s ongoing engagement with global policymakers, who are increasingly viewing hydrogen as a solution to meeting their decarbonization and energy security goals. 

Today, hydrogen accounts for less than 2% of Europe’s energy consumption and is primarily used to produce chemical products. However, in recognition of hydrogen’s potential for decarbonizing hard-to-abate industrial processes like steel, ammonia, and methanol production, the European Commission has announced its ambition to develop the capacity to produce 10 million tons of renewable hydrogen and import an additional 10 million tons annually by 2030. 

In the long term, green hydrogen also has the potential to bolster Europe’s energy security by reducing its dependence on Russian fossil fuel imports. Since green hydrogen could be produced anywhere with rich solar and wind resources, it will be harder for Russia to wield its oil and gas resources as “political weapons,” said panelist Joseph McMonigle, Secretary General of the International Energy Forum. 

Due their geographic proximity and their renewable energy potential, many Middle Eastern and North African countries have developed ambitious hydrogen strategies and could become major suppliers to Europe. A report published by the Future of Hydrogen project last year found that Morocco could become a main exporter of hydrogen to the European Union, supplying between 21-40% of EU demand by 2050 and capturing 4% of the international market by 2030. Rim Berahab, Senior Economist at the Policy Center for the New South in Rabat, confirmed that Morocco is pursuing an export-oriented national energy strategy and developing early partnerships with Germany and Portugal. She noted that water scarcity will require Morocco’s hydrogen production to be close to the seaside, paradoxically giving the country an advantage in terms of shipping to Europe.

Despite these encouraging prospects, the panelists acknowledged the existence of significant technical barriers to the development of a shared Mediterranean hydrogen industry. The cost of green hydrogen is still higher than that of hydrogen produced from natural gas (though these prices do not reflect the negative externalities of carbon emissions, or skyrocketing natural gas costs due to the war in Ukraine as De Blasio is quick to mention). Transportation also poses a problem: hydrogen’s low volumetric energy density makes it expensive to ship. Panelist Gilles Badot, Director of the Adriatic Sea Department of the European Investment Bank, also pointed out that while green hydrogen excels as a medium for renewable energy storage, Europe is far from producing large surpluses of renewable energy. 

Among the wide variety of solutions offered by the panelists for addressing these challenges. McMonigle proposed that the technological expertise of traditional oil and gas companies would be instrumental in ramping up the hydrogen economy. Silvio Micali, Ford Professor of Engineering at MIT, suggested that blockchain technology could be used to track and certify the carbon intensity of hydrogen.

The Future of Hydrogen project, with De Blasio at the helm, will continue to advise policymakers as the world accelerates its move toward a hydrogen-based economy. In October 2022, ENRP Associate Laima Eicke and De Blasio published a report entitled “The Future of Green Hydrogen Value Chains” that included a case study on Germany, which will depend on imports to supply its mature steel and ammonia industries and will need to implement targeted policies to sustain competitiveness and avoid industrial relocations to countries with more solar and wind resources. On December 20, 2022  , De Blasio presented a policy brief   summarizing the findings from two reports – “The Future of Renewable Hydrogen in the European Union” and “The European Union at a Crossroads” - to EU member states during a workshop on the development of the European Hydrogen Bank. 

“In the past, we’ve made mistakes when deploying energy systems at scale…We really need to avoid repeating the same inefficiencies that we are painfully paying for today,” emphasized De Blasio.

Watch a recording of the panel discussion below.